Wednesday, January 9, 2008

Supreme Court hears charitable immunity cases

Chief Justice Leroy Rountree Hassell Sr. noted that the University of Virginia Health Services Foundation pays annual bonuses ranging from $70,000 to more than $850,000 to physicians who work at U.Va. Hospital.

“To me, it raises a big eyebrow,” Hassell told Charlottesville lawyer Donald R. Morin, who was trying to convince the Supreme Court of Virginia that the foundation has charitable immunity.

Morin responded that those amounts must be considered in the context of the salaries necessary to attract the best talent to a world-class medical school.

Hassell countered with a chuckle, “I think I’m on a world-class court, too,” adding that he and his colleagues get no such bonus.

The court heard arguments today in two cases in which Charlottesville Circuit Judge Edward L. Hogshire found that the foundation does not have immunity and one from Fairfax Circuit Judge Randy I. Bellows, who sat in the Charlottesville court by designation and found that it does.

Morin fielded far more questions than the attorneys who argued for the plaintiffs, Matthew B. Murray, R. Frazier Solsberry and L. Steven Emmert.

Justice G. Steven Agee focused, for example, on how those bonuses are determined. He noted that they are based on the amount of income generated by the physicians and their departments rather than on the amount of charitable work that they do.

The justices did not seem to be impressed, however, by arguments that the foundation gets its status as a charitable institution for tax purposes from support of the university and its hospital rather than from its own independent status as a charity.

That election for tax purposes has little to say about whether it meets the criteria for charitable immunity that the court established in Ola v. YMCA of South Hampton Roads Inc. (VLW 005-6-098), Justice Donald W. Lemons said.